If Longo's return on sales was 20% in 2012, is the company's profitability improving or declining? Prepare a multi-step income statement for 2013.Note: Do not use negative signs with your answers.LONGO & COMPANYIncome Statement2013Net Revenue$463,500Cost of Goods Sold17,300Gross Profit on Sales46,200Operating Expenses31,000Operating Income15,200Other Expenses1,200Income before Income Taxes14,000Income Tax Expense10,400Net Income3,600Calculate the company's return on sales ratio. Round answer to one decimal place.If Longo's return on sales was 20% in 2012, is the company's profitability improving or declining?Return of sales for 2013=0 % and thus,the company's profitability is declining

The return on sales is calculated as operating income divided by net sales.

Answered: Longo's return on sales was 20% in…

Business

Accounting

Longo's return on sales was 20% in 2012, is the company's profitability improving or declining?

FINANCIAL ACCOUNTING

10th Edition

ISBN:9781259964947

Author:Libby

Publisher:Libby

Chapter1: Financial Statements And Business Decisions

Section: Chapter Questions

Problem 1Q

See similar textbooks

Related questions

Q: Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 2020…

A: $2,215,000Explanation:The Exponential Triple Smoothing (ETS) method is used by the FORECAST.ETS…

Q: The return on the Agnes Corporation in the state of recession is estimated to be -20% and the return…

A: StateProbabilityAgnes returnsCameron returnsRecession0.6-20%43%Boom0.433%-20%

Q: A. Complete the Year 2 income statement data for Green Caterpillar, then answer the questions that…

A: One of a company's fundamental financial statements, the income statement exhibits the company's…

Q: Saddie & Co.'s return on assets (ROA) for the current year was 6.23%. Which of the following is true…

A: Return on assets is the ratio between income and average assets. It is calculated by dividing…

Q: If projected sales growth is actually 14.90%, Calculate the EFN. (Refer to Exhibits 19.10 and…

A: Growth Rate = 14.90% Income Statement Particulars Current($) Projected($) Net Sales 120…

Q: Suppose that in 2016, Global launches an aggressive marketing campaign that boosts sales by 18%.…

A: Ratio analysis used identify the business performance of the company.It is used to measure financial…

Q: а. samm Corp had salės of $300 illion, a net pront margin of 8% and a dividend payout ratio of 30%.…

A: Sales = 300,000,000 Net Income = Net Profit Margin * Sales Net Income = 8%*300,000,000 Net Income =…

Q: Consider the following scenario: Green Caterpillar Garden Supplies Inc.'s Income statement reports…

A: Income statement is the systematic representation of operating and financial data that helps to…

Q: Cordell, Inc., has an operating leverage of 3. Sales are expected to increase by 9% next year. What…

A: The expected change in the operating income next year is given by: Degree of operating leverage *…

Q: In 2017, Burger King successfully acquired Popeye for $1.8 billion. If income from productsales is…

A: Rate of return- A rate of Return (ROR) is the gain or loss of an investment over a certain period of…

Q: Is the current-year return on assets better than the 10% return of competitors for (a) Apple and (b)…

A: Ratio analysis is a tool used by the financial analyst to measure the financial performance of the…

Q: Jasmine Manufacturing wishes to maintain a sustainable growth rate of 9.75 percent a year, a…

A: Sustainable growth rate is the growth rate that can be obtained without any additional funding…

Q: DURING 2024, SPLISH BROTHERS'S SALES INCREASED BY 26.0%. IF ACCOUNTS RECEIVABLE INCREASED BY 37.0%,…

A: C. THE COMPANY MAYBE INCREASING SALES BY LOOSENING ITS CREDIT POLICIESExplanation:Option a: This…

Q: A company's margin of safety is $110,000. If the company's sales drop by $70,000, it will still have…

A: Operating Income is the difference between total revenue and total operating expense of the…

Q: You are a financial analyst, and you are tasked with calculating the expected return and standard…

A: State of EconomyProbability (A)Estimated return…

Q: Your business plan for your proposed start-up firm envisions first-year revenues of $180,000, fixed…

A: Degree of operating leverage :— It is calculated by dividing contribution margin by operating…

Q: Suppose that in 2023, Global launched an aggressive marketing campaign that boosted 2023 sales…

A: Step 1: The calculation of the EBIT, net income, and stock price ABC1Sales $ 186.70…

Q: Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 2020…

A: The objective of the question is to forecast the next year's sales using the naïve approach. The…

Q: If a company increases advertising by Php500,000, this will cause net operating income to increase…

A: Given: Advertising expenses = Php 500,000

Q: market value added rise or fall? affect our assessment of the performance of fferently about Home…

A: Market Value Added Market value added (MVA) signifies the wealth generated by a company for its…

Q: A recession is anticipated to lower GDP by 4.0%. Orange Inc. believes that its sales will drop 2.0%…

A: Return on assets: It is the total return that is generated by a company by the proper allocation of…

Q: Riley Co. has a DOL of 140% and a DFL of 113%. If sales decrease by 12%, what is the expected…

A: DOL measures the percentage change in operating income(EBIT) for a percentage change in sales. A…

Q: Jasper Jewelry has $150 million in sales. The company expects that its sales will increase 5% this…

A: Sales =$150 Million Sale increase percentage =5% Inventories = $11 + 0.07(Sales)

Q: unland Corp had sales of $389,000 in 2017. If management expects its sales to be $476,450 in 4…

A: The question is based on the concept for calculation of annual growth rate . Formula as :…

Q: Less: Common stock dividends Contribution to retained earnings 1,464,750 $2,620,250 Given the…

A: Since you have posted a question with multiple sub parts, we will provide the solution only to the…

Q: . Please calculate Starbucks Debt Ratio for each year. Do we want this ratio higher or lower? Did…

A: We use financial ratios to assess the financial health and financial position of a company. There…

Q: If a company invests $100 million today which will not produce any impact in the near future, but…

A: The 100million investment can be considered as a capital expenditure that would be depreciated or…

Q: Using the percent-of-sales method, determine whether the company has external financing needs, or a…

A: External Financing Needed: It refers to the additional funds required by the company or…

Q: Sales for Green Inc. are expected to change by 16%. If Green's degree of operating leverage is 2.20,…

A: We need to use degree of operating leverage formula that depicts the relationship between the…

Q: constant, use the AFN equation to determine the firm's self-supporting growth rate-in other words,…

A: The maximum growth rate that an organization can accomplish without having recourse to outside money…

Q: Sawyer Corporation's 2015 sales were $9 million. Its 2010 sales were $4.5 million. At what rate…

A: Computation of the growth rate of sales is shown as follows: Hence, the growth rate in sales is…

Q: Assuming costs vary with sales and a 20 percent increase in sales is projected, create the pro forma…

A: Due to our protocol only first three sub-parts are solved as there are four sub-parts. The plug…

Q: Sawyer Corporation's 2018 sales were $5 million. Its 2013 sales were $2.5 million. a. At what rate…

A: A company sells its products and services. This is done to generate revenue and earn a profit.

Q: Suppose a firm has had the following historic sales figures. Year: 2016 2017 2018 2019 2020 Sales…

A: Sales increase or decrease because it does not remain the same over time. The company makes an…

Q: 13. Nets sales of the Premiere General Store have been increasing at a reasonable rate, but net…

A: Net Sales The term net sales indicate that the total revenues of the firm over a stipulated period…

Q: Teal Company has a DOL of 120%. If sales were to increase by 5%, what is the expected impact on…

A: Solution: Degree of Operating Leverage (DOL) measures the percentage change in EBIT (Earnings before…

Q: Answer the following lettered questions on the basis of the information in this table: Amount of…

A: Since more than one question is asked at a time the answer for first question is provided as per…

Q: In 2017, Burger King successfully acquired Popeye for $1.8 billion. If income from product sales is…

A: Given that: Investment = $1.8 billion = $1800 million Sales = $1 billion = $1000 million Net profit…

Q: Consider the following scenario: Blue Hamster Manufacturing Inc.'s income statement reports data for…

A: As per Bartleby policy in case of multiple sub parts only first three subpart can be answered. So…

Q: apital that it must raise. Which of the following conditions would cause the AFN to DECREASE? Group…

A: Financial Management: Financial management comprises of two words i.e. Finance and management.…

Q: dwards Industres nas million in sales. The company e basis of recent history, the estimated…

A: The amount of Days Sales Outstanding will be calculated using the formula

Q: Shalit Corporation's 2011 sales were $12 million. Its 2006 sales were $8 million. At what rate have…

A: Sales in 2006 (I) = $8 millionSales in 2011 (F) = $12 millionPeriod (n) = 5 Years (i.e. from 2006 to…

Q: Analysts projected that Apple will have earnings per share 2.5$. The industry has average PE ratio…

A: The stock price can be calculated on the basis of relative valuation metrics. The PE multiple can be…

Q: Consider the following scenario: Fuzzy Button Clothing Company’s income statement reports data for…

A: Note: As per the question provided, the income statement is prepared. Income statement expresses the…

Q: Red Spark Incorporated is interested in assessing the following scenarios on its indicators of…

A: The return on assets indicates the profitability of the company. It is the comparison of the net…

Question

If Longo's return on sales was 20% in 2012, is the company's profitability improving or declining?

Prepare a multi-step income statement for 2013.
Note: Do not use negative signs with your answers.
LONGO & COMPANY
Income Statement
2013
Net Revenue
$4
63,500
Cost of Goods Sold
17,300
Gross Profit on Sales
46,200
Operating Expenses
31,000
Operating Income
15,200
Other Expenses
1,200
Income before Income Taxes
14,000
Income Tax Expense
10,400
Net Income
3,600
Calculate the company's return on sales ratio. Round answer to one decimal place.
If Longo's return on sales was 20% in 2012, is the company's profitability improving or declining?
Return of sales for 2013=
0 % and thus,
the company's profitability is declining

Expert Solution

This question has been solved!

Explore an expertly crafted, step-by-step solution for a thorough understanding of key concepts.

This is a popular solution!

SEE SOLUTION Check out a sample Q&A here

Step 1 Introduction

VIEW

Step 2 Solution

VIEW

Trending now

This is a popular solution!

Step by step

Solved in 2 steps

SEE SOLUTION Check out a sample Q&A here

Knowledge Booster

Learn more about

Need a deep-dive on the concept behind this application? Look no further. Learn more about this topic, accounting and related others by exploring similar questions and additional content below.

Similar questions

net sales of Premiere Gen. Store have been increasing at a reasonable rate but net income has been declining steadily as percentage of these sales. What appears to be the problem?
If I have a Return on Equity of -25,530%, how do I interpret that? My professor is looking for an answer such as "Home Depot generated a profit of about X cents for every dollar in its average equity throughout the year".
Ogier Incorporated currently has $800 million in sales, which are projected to grow by 10% in Year 1 and by 5% in Year 2. Its operating profitability ratio (OP) is 10%, and its capital requirement ratio (CR) is 80%?a. What are the projected sales in Years 1 and 2?b. What are the projected amounts of net operating profit after taxes (NOPAT) for Years 1 and 2? c. What are the projected amounts of total net operating capital (OpCap) for Years 1 and 2?d. What is the projected FCF for Year 2?
Suppose a firm has had the historical sales figures shown as follows. What would be the forecast for next year's sales using the average approach? Year 2017 2018 Sales $ 750,000 500,000 Multiple Choice O $695,000 $700,000 $750,000 $775.000 2019 $ 700,000 2020 $ 750,000 2021 $ 775,000
Which of the following statements is TRUE? When EBIT and total assets both increase by 25%, the basic earnings power will also increase O a. An increase in the quick ratio over time means that the company's liquidity position is improving. O b. approximately by 25%. A lower than the industry's average inventory turnover ratio means that the company turns over or sells O C. and replaces its inventory more times per year. A higher than industry average P/E ratio indicates the company's stock must be overvalued. d.
The return on the Rush Corporation in the state of recession is estimated to be -23% and the return on Rush in the state of boom is estimated to be 32%. The return on the Oberman Corporation in the state of recession is estimated to be 45% and the return on Oberman in the state of boom is estimated to be -16%. Given this information, what is the covariance between Rush and Oberman if there is a 0.70 probability that the economy will be in the state of boom and a 0.30 probability that the economy will be in the state of recession. Place your answer in decimal form and not as a percentage
Calculate Return on Investment (ROI) and Economic Value Added (EVA).Use the following data for Eastern Investments Company to calculate ROI and EVA for 2013 and 2014. Analyze the results. Eastern Investments 2013 2014 Sales $325,000,000 $395,000,000Net Operating Profit After Tax $55,000,000 $60,000,000Net Income $35,000,000 $42,000,000Invested Capital $125,000,000 $145,000,000Adjusted Average Invested Capital $350,000,000 $380,000,000Cost of Capital 11% 11%Required:Calculate ROI for 2013 and 2014Calculate EVA for 2013 and 2014Is Eastern Investments performance improving year on year? Why?
A firm is considering several policy changes to increase sales. It will increase inventory by $10,000 it will offer more liberal sales terms but will result in average receivables increasing by $65,000. These actions are expected to increase sales by $800,000 per year, and cost of goods will remain at 80% of sales. Because of the firm’s increased purchase of its won production needs, average payable increases by $35,000.What factors should they consider when making these decisions? What effects would they have on the firm’s cash cycle? Please select three financial ratios they should consider and why
Jim's Espresso expects sales to grow by 10.4% next year. Assume that Jim's pays out 85.9% of its net income. Use the following statements LOADING... and the percent of sales method to forecast: a. Stockholders' equity b. Accounts payable The Tax Cuts and Jobs Act of 2017 temporarily allows 100% bonus depreciation (effectively expensing capital expenditures). However, we will still include depreciation forecasting in this chapter and in these problems in anticipation of the return of standard depreciation practices during your career. Income Statement Sales $205,430Costs Except Depreciation (99,920)EBITDA $105,510Depreciation (6,070)EBIT $99,440Interest Expense (net) (570)Pretax Income $98,870Income Tax (34,605)Net Income $64,265 Balance Sheet Assets Cash and Equivalents $14,920Accounts Receivable 2,010Inventories 3,950Total Current Assets $20,880Property, Plant and Equipment 10,070Total Assets $30,950 Liabilities…
Problem: Jasper Jewelry has $150 million in sales. The company expects that its sales will increase 4% this year. Jasper's CFO uses a simple linear regression to forecast the company's inventory level for a given level of projected sales. On the basis of recent history, the estimated relationship between inventories and sales (in millions of dollars) is as follows: Inventories = $10 + 0.07(Sales) Given the estimated sales forecast and the estimated relationship between inventories and sales, what is your forecast of the company's year-end inventory level? Enter your answer in millions. For example, an answer of $10,550,000 should be entered as 10.55. Do not round intermediate calculations. Round your answer to two decimal places.
If Anna Cullumber, the company’s president, is successful in increasing sales revenue by 5%, by what percent will the company’s operating income increase?
Suppose a firm has had the following historic sales figures. Year: 2016 Sales $1,420,000 2017 $1,720,000 Next year's sales 2018 2019 2020 $1,600,000 $2,010,000 $1,770,000 What would be the forecast for next year's sales using FORECAST.ETS to estimate a trend? Note: Round your answer to the nearest whole dollar. 27